Psychological momentum *is* a thing. It characterizes a collective shift in confidence, motivation, and effort. Does it operate by the same rules as physical momentum? No, of course not. I don't think anyone is implying that it does. It is certainly more complex than a simple mathematical equation, and to that point, I agree with you. A loss affects the confidence component of momentum, but it can also affect motivation and effort in other ways. Since the Cougs aren't out of the playoff race yet, it may positively affect motivation and effort. A few solid practice with increased motivation and effort may even increase confidence to levels higher than the week before (especially if the players were playing afraid to lose).
So, I think I agree with your primary point, just not how you get to it. Just because something is psychological doesn't mean it "doesn't exist". You may as well argue that love doesn't exist by the same token. These are hypothetical constructs that can't be directly observed or measured--but certainly that doesn't mean they don't exist. They are rocks under the rapids. You know they are there because of the rapids even though you can't directly see or measure the rocks themselves.